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Using telephone surveys, we examined exposure to terror, coping, and mental health response in randomly selected Jewish‐Israelis (n = 100) and Arab‐Israelis (n = 100) living in five Israeli cities affected by terrorism. Jewish‐Israelis and Arab‐Israelis were randomly selected for study participation and completed telephone surveys in May 2002, following an extended string of terror attacks and hostilities. Although terrorism is designed to target Jewish‐Israelis, the rates of exposure were similar in the two groups. Arab‐Israelis reported using a wider array of coping strategies, yet also endorsed more frequent PTSD and more severe depression symptoms than Jewish‐Israelis. We examined a variety of demographic, ethnic, and religious predictors of different coping styles and found varying results. For example, acceptance coping was best predicted by Arab‐Israeli ethnicity, being female, greater religiosity, and lower education. Predictors of mental health response to terror were also examined, with Arab‐Israeli ethnicity, being female, adaptation coping and collaborative coping best predicting PTSD and depression symptoms. Arab‐Israelis may not have the same access to overarching sources of patriotic support that are readily available to their Jewish compatriots, and civilian and economic inequity experienced by the Arab minority may add to a sense of diminished resources. Our findings justify outreach efforts to overlooked minorities at risk for posttraumatic distress. Women seem to be at particular risk for the development of mental health symptoms following terrorism, which should also be noted for outreach purposes.